Overpricing - how much does it cost sellers

ASK THE EXPERT

Q. I have just had my house valued but I think it is worth more than the agent suggested. Is there anything wrong with testing the market by putting it up for sale at a higher price?

A. Firstly, your home is not necessarily worth what you think it is. The truth is that every property is worth precisely what a serious buyer is prepared to pay for it and ultimately what you are prepared to accept and that’s why setting the asking price or guide price is the most difficult but most important part of the whole marketing and selling process to get right.

Now, of course, it is only natural that we all want to achieve the best possible price for our homes and as a result it’s always tempting to err on the optimistic side. After all, years ago, it wasn’t unknown for some properties to sell for substantially more than its original valuation. However, those days are gone and going to market at an inflated price really is not a good idea – particularly now, given that there are fewer buyers than then and those that are in the market are understandably very price conscious.

In the current climate, it’s not even worth taking a punt, just in case there’s someone out there who’s prepared to pay a bit over the odds for his or her dream home. By doing so, you could actually be spoiling your best chance of getting a sale – and that’s certainly not something you want to risk doing in today’s market. Statistics show that properties invariably attract the most viewings during their first few weeks on the market and that’s also generally the time when the best offers are made. Thereafter, buyer interest tends to decline. Even when prices are later reduced, it can be difficult to encourage buyers to reconsider a property they have already rejected and It’s not uncommon at all for buyers to specifically avoid homes that have been reduced in price on a number of occasions; often, rightly or wrongly they assume that there must be something wrong with it!

The latest figures for South Somerset show that in the last 3 months alone there have been over £5.6 million of price reductions !!! There is clearly a lot of overvaluing going on as a way to try and flatter sellers to use a certain agent. This is very detrimental to the seller as on average they are losing £17,652 each!

You might like to consider asking your agent about marketing your home on the basis of a guide price and quote ‘Offers in the region of…..’, and if pitched at the right level, it could generate extra buyer interest. But take the advice of your agent – after all, they’re the ones with market experience.